Apollo to Pursue Additional RE Debt Acquisition

There’s little doubt that debt, besides being the raw material of the real estate crunch, is also a pretty hot commodity in some ways, as property values decline and loan-to-value ratios shift. In recent weeks, as reported by CPN, such investors as the new Investcorp Real Estate Credit Fund L.P. and Inland American Real Estate Trust have been eager to snap up real estate debt. New York-based Apollo Real Estate Advisors has also stepped up its interest in real estate debt recently, raising additional capital for its debt investment fund, Apollo Real Estate Finance Corp. (AREFIN). All together, the firm says it has increased the overall capital for AREFIN’s investment program from $621 million to $930 million through the formation of AREFIN Co-Investment Corp. (ACC), with the additional funds providing the ability to make larger investments. AREFIN, formed in 2006, originates loans for development, redevelopment and repositioning, and invests in whole loans, B-notes and mezzanine loans. ACC, the new vehicle, was formed to accommodate the increased deal flow and to handle loan commitments up to $250 million. Earlier this year, AREFIN and M&T Bank provided a $163.5 million floating-rate debt package to Taconic Partners and Square Mile Capital for the $172 million purchase of 375 Pearl Street, a 1.2 million-square-foot office building in Manhattan, also known as the Verizon Building. Apollo arranged for M&T Bank to provide $110 million in senior debt financing. Apollo is an international real estate investor and fund manager. Since its founding in 1993, it has established a number of real estate funds and joint ventures totaling about $11 billion in equity commitments for investment in the United States and elsewhere. The Apollo funds collectively have invested in more than 465 transactions with an aggregate value of more than $40 billion.